Modification of Certificate-Issuance of Complete Heavy-Hauler Authority

Division 1 concluded that a petitioner's certificates authorizing the transportation of "heavy machinery," obtained in 1938 by a successor of petitioner under the grandfather provisions of the Act, should be modified so as to authorize a complete heavy-hauler operation “in order that the evident intent behind their original issuance can be achieved.” Machinery Transports, Inc.-Modification, 112 M.C.C. 592. It noted that the operating authorities in question were not unlike many other issued during the first years of motor carrier regulation, that petitioner had consistently held itself out to provide a heavy-hauler service, and the steady evolvement of heavy-hauling from a field of service initially described in terms of commodities hauled to one defined principally by preference to the type of service performed. In view of all this, the Division found that the involved authorities were issued in contemplation of what is now considered a complete heavy-hauler service.

Proposed Operation Must Serve A "Useful Public Purpose"

In Transcontinental Haulers, Inc., Com. Car. App., 112 M.C.C. 535, Division 1 noted that a public demand existed for the proposed transportation of unusually large boats. However, it recognized that under the Pan-American Bus Lines Operation, 1 M.C.C. 190, 205, criteria, the proposed service must be shown to be in furtherance of a "useful public purpose." Since the proposed service could, for all practical purposes, be performed only in violation of state highway laws. and regualtions, i.e., permits could not be obtained for transporting these large boats in certain states, or with traffic which would be diverted from existing carriers, the Division concluded that such a proposed operation would not serve a "useful public purpose, and the applica

tion should be denied.

ICC Rejects Classification Ratings Based Solely on Density

Division 2 has rejected a proposed rule which provided for increased rating on commodities which, as tendered for shipment, have densities of less than six pounds per cubic foot. It concluded that no just and reasonable ratings can result from the application of a fixed formula to all commodities which disregards their particular characteristics, noting that the rule does not establish a classification of property but, rather, a classification of packages, without regard to the property of which they consist or which they may contain. Furthermore, it found that the record contained no persuasive support for the assertion that classification ratings cannot be adequately handled by the customary classification methods, i.e., assigning each article or group of articles to a class according to recognized classification principles or elements, a complete list of which appear in Motor Carrier Rates in New England, 47 M.C.C. 657, 660-661, in order that all traffic will bear a fair share of

the transportation burden. Classification Rating Based on Density, 337 I.C.C. 784.

Classification Ratings on Furniture-Shipping Density

While neither disapproving the concept of LTL classification ratings of furniture on a density basis, nor objecting to the proposed density formula per se (337 I.C.C. at 713), the Commission ordered the proposed schedules cancelled because of the "lack of adequate underlying evidence to show that [the density formula] was devised, not arbitrarily, but on a just and reasonable basis." Classification Rating on Furniture, 337 I.C.C. 709.

Without intending to limit the evidence which carriers present, or to prescribe the sole method for producing evidence, the Commission detailed, in the remainder of its report (357 I.C.C. at 714-716), certain guidelines for a traffic study of density.

Repeated Unauthorized Issuance of Securities-Investigation Ordered to Determine Willfulness of Actions and Explore Appropriate Remedial Measures

In Atlas Van Lines, Inc.-Notes, 338 I.C.C. 291, the Division found that applicant had issued 52 notes in a three-year period, each of which was beyond the scope of the authorizations ordered by the Commission. It noted that Section 214 of the Act makes the issuance of any security in contravention of a Commission order void. Recognizing that the involved application merely sought approval of the notes whose issuance was already accomplished and which were void, the Commission reiterated that, by virtue of the language of Section 20(11) (incorporated into § 214), a void security cannot be made lawful and that it will not retroactively legalize void securities. While the Division recognized that it has permitted new notes to be issued for a like amount where the void notes were found to have been issued inadvertently, it concluded that the involved facts belie any claimed inadvertence. Moreover, the Division concluded, business pressures do not justify financing techniques which result in a violation of the securities provisions of the Act.

Inasmuch as applicant had issued many of the notes is question after being advised by the Commission that it had exceeded the limit of its authorization, the Division instituted an investigation to determine if the applicant had been in willful violation of Section 20(11) of the Act. Furthermore, while noting that Section 20a (11) gave void securities. certain status under the law, affording protection to the holder in good faith (citing Transcontinental Bus. Systems, Inc., Notes, 80 M.C.C. 54), it concluded that an investigation would also be useful in determining appropriate remedial measures for securities outstanding without the requisite issuance authority.

Piggyback Service Regulations-Interpretation of Circuity

Limitation

In Interpretation of Piggyback Service Regulations, 337 I.C.C. 813, the Commission clarified Rule 1090.5 of its TOFC or piggyback service regulations (49 C.F.R. 1090) by concluding that the words "origin" and "destination" employed in the circuity limitations provision of the TOFC service regulations refer

to the points, on the authorized service route of the motor (or water) carrier proposing to use TOFC service in substitution for its authorized all-highway (or all-water) line-haul transportation, where an individual shipment begins its journey (“origin”) and ends its journey ("destination");

and it found that the phrase "the distance from origin to destination over the route including the TOFC movement" employed in the said circuity limitations provision refers

...

to the total distance traversed from "origin" . . . to “destination” over the route, comprised of the combined movement in motor (or water) service, if any, and TOFC rail service, which the motor (or water) carrier desires to utilize in substitution for its authorized all-highway (or all-water) line-haul transportation from said "origin" to said "destination."

Denial of Application for Authority Between Points Within SingleState Where Character of Prior Interstate Movement Not Shown

Noting that a for-hire motor operation between two points within a single state is not subject to the Commission's regulation if the immediately prior transportation has been performed either in private carriage or for-hire water carrier exempt from economic regulation pursuant to Section 303(b) of the Act, citing Motor Transportation of Property Within Single State, 94 M.C.C. 541 and The Pennsylvania Railroad Company v. United States, 242 F. Supp. 890, affirmed, per curiam, 382 U.S. 372, Division 1, in Commercial Carrier Corp., Extension Salt, 112 M.C.C. 415, denied applicant's request for authority between two points within the same state where the record failed to disclose the nature or character of the prior interstate movement, i.e., in exempt, private, or for-hire regulated carriage.

Procedure-Reopening Decision After it Becomes Administratively Final-Consideration of Evidence in Another Proceeding

Division 1 concludes that although a Commission decision may be administratively final, and ripe for court review, it has continuing jurisdiction over its orders and is empowered to reconsider and to rescind or modify its orders at any time for the purpose of correcting an error or injustice. Braswell Motor Freight Lines, Inc., Extension, 112 M.C.C.

558. The Division also concluded, after considering the evidence in two related proceedings for the same authority, that administrative agencies are not required to confine their determinations squarely within the four corners of the specific records in administrative proceedings, and the mere fact that a determining body looks beyond the involved record does not invalidate its action "unless substantial prejudice is shown to result."

Denial of Purchase Application Where Irregular and

Regular-Route Rights Involved

Division 3, recognizing that it has approved applications for unification of irregular- and regular-route rights where it has appeared that the true nature of the irregular-route operations would be preserved, concluded, in C.O.D.E., Inc.-Control-Nolte Bros. Truck Lines, 109 M.C.C. 552, that since the irregular-route authority served to bridge the gap between the regular-route rights involved, it would be impossible to prevent the entire operation from becoming regular route in nature. It noted, in this connection, that it has usually denied such applications where it is apparent that the irregular-route rights would be used to bridge the gap between segments of regular routes, citing Folwell Fast Frt., Inc.-Pur.-Draper, and Evens Line, Inc., 40 M.C.C. 439, and Shuster's Exp., Inc.-Pur.-Stankovich & Roberts, 97 M.C.C. 488.

RICHARD RIDDICK

Ex Parte No. 266

Investigation Into the Status of Freight Forwarders

In this proceeding, the majority of the Commission recommended that some change be made (at least for a three-year period) in the relationships of freight forwarders to the underlying railroads they utilize in their service, and that a rulemaking proceeding should be instituted to determine whether the terminal area within which freight forwarders may perform pickup, delivery, and transfer services, should be extended. Said the Commission: "If any one thing is clear from the evidence assembled in the course of the present investigation, it is that forwarding is at best a static industry.'

The Interstate Commerce Commission in a Report served January 25, 1971, recognized that the freight forwarding industry regulated under Part IV of the Interstate Commerce Act during the past two decades has remained virtually unchanged insofar as growth of tonnage is concerned. The Commission initialed Ex Parte No. 266 on June 23, 1970, on their own motion, to inquire into the status and operations of freight forwarders. The notice of proposed rulemaking identified the following purposes of study: (1) to consider whether changes should be made in the relation between freight forwarders and the carriers which they employ for the underlying physical transportation services; (2) to determine whether, as to these, the freight forwarders should no longer be treated as shippers, but rather as carriers able to join with connecting rail, motor or water carriers in the establishment of through routes and joint rates; (3) to explore whether freight forwarders should no longer be treated as a separate mode of transportation under Part IV of the Act; and (4) to take such other and further action, including the recommendation of any legislation, as the facts and circumstances may justify or require.

66*

The Commission stated they had instituted this "general investigation" into the proper role to be assumed in surface transportation by regulated freight forwarders at the request of the Committee on Interstate and Foreign Commerce of the House of Representatives. In their Discussion and Conclusions, the Commission said, among other things: **We are persuaded, that the freight forwarding industry should be given every opportunity to prove its continued usefulness and to demonstrate that it still has a vital role to play on the national transportation scene. It is for this reason-and not because we are able to forecast with certainty the result of the enactment of legislation such as H.R. 10293 and S. 3803—that we are now prepared to alter our traditional position with respect to freight forwarders and to recommend a substantial change in the regulatory treatment of that industry.'